2025 BAH RATES HAVE BEEN ANNOUNCED: WHAT YOU NEED TO KNOW

Basic Housing Allowance (BAH) has increased in 2025, and it’s more than the initial push by supporters. BAH rates in 2025 are helping service members enjoy an increase to help cover their living expenses, and while everyone’s individual BAH rates will vary, the cost of living is one of the biggest factors involved. Here’s a closer look at what 2025 will bring.

What Are the BAH Rates in 2025?

While lawmakers and the U.S. Department of Defense (DoD) pushed for an average increase of 4.5%, BAH rates in 2025 actually increased 5.4%, on average.

Lawmakers approved these provisions to make the 2025 BAH rate increase go through and take effect for all branches beginning on January 1.

"The budget funds must-pay items related to quality of life and quality of service, such as a 4.5% pay raise for our service members that builds on raises for the past three years in a row, including last year's 5.2% pay raise," said Deputy Defense Secretary Kathleen Hicks.

These sentiments rang true as lawmakers were able to find an increase in service members while many military families are still dealing with an elevated cost of living.

Things to Consider

The 2025 military BAH rates will cover 95% of the living expenses for families but everyone’s actual benefits look different.

This is because the military considers many different factors, including your grade, how many dependents you have, and the cost of living where you’re stationed.

Service members who live OCONUS (outside of the continental United States) typically receive more because it costs more to live overseas—these benefits are known as an Overseas Housing Allowance (OHA).

If you’re looking to prepare, you can get an estimate of what to expect by looking at your local cost of living index.

BAH is determined by looking at the median rent in your area as well as the average cost of covering utilities for civilians within a local market.

Historical BAH Rate Increases Leading to 2025

Leading up to the proposed 4.5% increase in 2025, BAH rates have been elevated in recent years:

• 2024: 5.4%

• 2023: 12.1%

• 2022: 5.1%

The main culprit for these increases was ongoing inflation and housing market conditions that were unfavorable for many service members.

Even the 4.5% rate would be an elevated departure from previous years with more favorable economic conditions, including increases of 2.9% in 2021, 2.8% in 2020, and 2.6% in 2019.

Hopefully, the 2025 BAH rates will increase to help military families as economic conditions may be tapering off but are still affecting Americans across the country and the world.

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